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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 10-KSB

                 Annual Report Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934
                 For the fiscal year ended September 30, 1996

                         Commission File No. 01-21617

                            THE QUIGLEY CORPORATION
            (Exact name of registrant as specified in its charter)

            Nevada                               23-2577138
     (State or other jurisdiction of           (IRS Employer 
      incorporation or organization)          Identification No.)



             Landmark Building, PO Box 1349, Doylestown, PA 18901
                   (Address of principal executive offices)

              Registrant's telephone number, including area code:
                                 215-345-0919

                Securities registered pursuant to Section 12(b)
                               of the Act: None
                Securities registered pursuant to Section 12(g)
                   of the Act: COMMON STOCK ($.001 Par Value)

     Indicate by check mark whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities  Exchange Act of
1934  during the  preceding  12 months (or for such  shorter  period  that the
Registrant  was  required to file such  reports),  and (2) has been subject to
such filing requirements for the past 90 days. Yes X No___

     As of December 31, 1996,  the aggregate  market value of the voting stock
(all of one class $.001 par value Common Stock) held by  non-affiliates of the
Registrant was $74,674,850 based upon the average of the closing Bid and Asked
prices of the Common Stock on that date as reported on the OTC Bulletin Board.

     Number of shares of each of the  Registrant's  classes of securities (all
of one class of $.001 par value  Common  Stock)  outstanding  on December  31,
1996: 6,049,596.




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                                    PART I

ITEM 1. BUSINESS

General Development of Business

     The Quigley Corporation  (hereinafter referred to as "the Registrant") is
a Nevada  corporation  which was  organized  on August 24, 1989 and  commenced
business  operations in October,  1989.  Pursuant to a Registration  Statement
filed in accordance with the Securities Act of 1933, as amended,  and declared
effective by the Securities  and Exchange  Commission on February 7, 1991, the
Registrant  in August of 1991 sold  2,113,433  Units of its  securities to the
public.

     The Registrant's  offices are located at Landmark Building,  PO Box 1349,
Doylestown,  PA 18901. The telephone number is (215) 345-0919.  The Registrant
maintains a home page on the Internet at  http://www.quigleyco.com  and can be
reached by e-mail at quigley@quigleyco.com.


Financial Information About Industry Segments

     See, Consolidated Financial Statements.

Narrative Description of Business Operations

     Since  its  inception,   the   Registrant  has  conducted   research  and
development  into  various  types  of  health-related   food  supplements  and
homeopathic  cold  remedies.  Prior to the current fiscal year, the Registrant
has  had  minimal  revenues  from  operations  and as a  result  had  suffered
continuing  losses due to research and  development  and operations  expenses.
However, the Registrant's product line has been developed, and during the most
recent fiscal year ended September 30, 1996, the Registrant has had increasing
and significant  revenues from its national  marketing  program and increasing
public awareness of its Cold-Eeze TM lozenge product.
 
     The Registrants  initial business was the marketing and distribution of a
line of nutritious health supplements (hereinafter "Nutri-Bars"). Beginning in
1995, the Registrant minimized its marketing of the Nutri-Bars and focused its
efforts  on  the  development  and  marketing  of  the  Registrant's  patented
Cold-Eeze TM zinc gluconate cold relief lozenge product.

     Since June, 1996, the Registrant has concentrated its business operations
exclusively on the manufacturing, marketing and development of its proprietary
COLD-EEZE and COLD-EEZER PLUS cold-remedy  lozenge products and on development
of various product  extensions.  The  Registrant'  lozenge products are based
upon a proprietary zinc gluconate  formula which in a clinical study conducted
by The Cleveland  Clinic has been shown to reduce the severity and duration of
the common cold. The Quigley Corporation acquired world-wide manufacturing and
distribution  rights to this  formulation  in 1992 from Dr.  John  Godfrey and
commenced national marketing in 1996.


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     The COLD-EEZE TM lozenge  products are  distributed  through  hundreds of
independent and chain drug and discount  stores  throughout the United States,
including Walgreen's, Revco, Osco/Sav-On,  Thrift Drug, CVS, RiteAid, Eckhard,
PharMor,  K-Mart,  and  wholesale  distribution  including,  McKesson,  Bergen
Brunswick,  Foxmeyer,  US Health Distributors.  The COLD-EEZER PLUS product is
marketed  through an exclusive  sales  agreement  with the QVC cable  shopping
network.

Products

The Cold-Eeze TM Cold Remedy Lozenge

     In May,  1992,  the  Registrant  entered into an exclusive  agreement for
worldwide representation,  manufacturing, marketing and distribution rights to
a zinc gluconate/glycine lozenge formulation developed by Dr. John C. Godfrey,
Ph.D.,  and patented in the United States,  United  Kingdom,  Sweden,  France,
Italy, Canada,  Germany, and pending in Japan. This product is presently being
marketed by the Registrant under the tradename  Cold-Eeze TM by the Registrant
directly and also through independent brokers and marketers, and is a featured
product on the QVC Cable TV shopping network.

     In 1996, the Registrant also acquired an exclusive license to manufacture
and market a  zinc-formulated  lozenge  which had been  patented by George Eby
III, thereby assuring the Registrant of exclusivity in the  manufacturing  and
marketing of zinc-formulated cold relief products.

     Under an FDA  approved  Investigational  New Drug  Application,  filed by
Dartmouth  College,  a  randomized   double-blind   placebo-controlled   study
(randomized  study),  conducted at Dartmouth College Health Science,  Hanover,
New Hampshire,  concluded that the lozenge  formulation  treatment,  initiated
within 48 hours of symptom onset,  resulted in a significant  reduction in the
total duration of the common cold.

     On May 22, 1992,  ZINC AND THE COMMON COLD, A CONTROLLED  CLINICAL STUDY,
by Dr.  Godfrey,  et  al.,  was  published  in  England,  in the  "Journal  of
International Medical Research", Volume 20, Number 3, Pages 234-246. According
to Dr. Godfrey (a) flavorings  used in other Zinc lozenge  products  (citrate,
tartrate, separate, orotate, picolinate, mannitol or sorbitol) render the Zinc
inactive and unavailable to the patient's  nasal  passages,  mouth and throat,
where   cold   symptoms   have  to  be   treated,   (b)  this  new,   patented
pleasant-tasting  formulation delivers approximately 93% of the active Zinc to
the mucosal  surfaces and (c) the patient has the same sequence of symptoms as
in the absence of  treatment,  but goes  through the phases at an  accelerated
rate and with reduced symptom severity.

     On  July   15,   1996,   results   of  a  new   randomized   double-blind
placebo-controlled  study on the common cold, which commenced at the Cleveland
Clinic  Foundation on October 3rd, 1994 was published.  The study called "Zinc
Gluconate  Lozenges for Treating the Common Cold" was  completed and published
in the Annals of Internal  Medicine - Vol.  125 No. 2. Using a 13.3mg  lozenge
(almost  half the strength of the lozenge used in our  Dartmouth  Study),  the
results still showed a 42% reduction in the duration of the Common Cold

Royalty and Employment Agreements

     The  Cold-Eeze  TM  product  is  manufactured  for the  Registrant  by an
independent manufacturer and marketed by the Registrant in accordance with the
terms of the licensing agreement (between the Registrant and Godfrey Science &
Design,  Inc. and John C.  Godfrey,  Ph.D;  hereinafter  "Dr.  Godfrey").  The
contract  is  assignable  by  the  Registrant  with  Dr.  Godfrey's   consent.
Throughout  the duration of the  agreement  Dr.  Godfrey is to receive a three
percent  (3%)  royalty  on all  gross  sales  (subsequent  to  the  Registrant
receiving payment upon such gross sales).

     A separate consulting  agreement between the parties referred to directly
above was  similarly  entered  into on May 4, 1992 whereby Dr. John C. Godfrey
and Dr. Nancy J.  Godfrey are to receive a consulting  fee of two percent (2%)
of gross sales of the lozenge by the Registrant for their consulting  services
to the Registrant with respect to such product.

     Pursuant to the License Agreement entered into between the Registrant and
George  Eby  Research,  the  Registrant  pays a royalty  fee.  Throughout  the
duration of the  agreement  George Eby of George Eby  Research is to receive a
three percent (3%) royalty on all gross sales  (subsequent  to the  Registrant
receiving payment upon such gross sales).

     An employment  agreement  between the  Registrant  and Guy J. Quigley was
entered into on June 1, 1995,  whereby Guy J.  Quigley,  along with the normal
considerations of an Executive Employment  Agreement,  in consideration of the
acquisition  of the cold  therapy  product,  is to  receive a royalty  of five
percent  (5%)  of  gross  sales  of the  Lozenge  by the  Registrant  for  the
termination of said agreement on May 31, 2005.

     An employment  agreement  between the  Registrant and Charles A. Phillips
was entered into on June 1, 1995, whereby Charles A. Phillips,  along with the
normal considerations of an Executive Employment Agreement,  shall receive 25%
(twenty  five per cent) of the  royalty  received  by Guy J.  Quigley,  either
directly from Guy J. Quigley or, if requested,  directly from the  Registrant.
Should  Charles A.  Phillips make such request upon  Registrant,  the said 25%
(twenty  five per cent) would be  deducted  from any  royalties  due to Guy J.
Quigley.

Broker, Distributor and Representative Agreements

     The  Registrant  has  several  Broker,   Distributor  and  Representative
Agreements,  both Nationally and  Internationally.  These agreements are sales
performance  based and in addition the  Registrant  has also issued  incentive
common stock purchase options to its Broker, Distributor and Representatives.

Patents

     The  Registrant  currently owns no patents.  However,  the Registrant has
been   granted  an   exclusive   agreement   for   worldwide   representation,
manufacturing,  marketing and distribution rights to a zinc  gluconate/glycine
lozenge formulation  developed by Dr. John C. Godfrey,  Ph.D., and patented as
follows:

United States:                No. 4 684 528 (August 4, 1987) AND
                              No. 4 758 439 (July 19, 1988)
Germany:                      No. 3,587,766 (March 2, 1994)
France & Italy:               No. EP 0 183 840 B1 (March 2, 1994)
Sweden.                       No. 0 183 840 (March 2, 1994)
Canada:                       No. 1 243 952  (November 1, 1988)
Great Britain:                No. 2 179 536 (December 21, 1988)
Japan:                        Pending.

     In 1996,  the  Registrant  also acquired  exclusive  license for a United
States  zinc  gluconate  use patent  number RI 33,465  from the patent  holder
George Eby of George Eby Research.  This use patent gives The  Registrant  the
only world-wide entity with rights to both use and formulation patents on zinc
gluconate for reducing the duration and severity of the common cold.

Research and Development

     The Registrant has completed its research and  development  projects with
respect to the COLD-EEZE  product and consequently no such  expenditures  were
incurred in the fiscal year ending September 30, 1996. However, the Registrant
will in the 1997 fiscal year incur research and  development  expenditures  to
develop  extensions of the lozenge  product,  including  potential  pediatric,
chewing gum and  mouthwash  formulations  of the  COLD-EEZE  product. 


ITEM 2.Properties

     The Registrant  currently maintains its executive offices at the Landmark
Building, 10 South Clinton Street, Doylestown, PA (and its alternative mailing
address  is  P.O.   Box  1349,   Doylestown,   PA  18901)  where  it  occupies
approximately  2,000 square feet of office space  pursuant to a written 3-year
lease  agreement with an unaffiliated  landlord.  The Registrant also occupies
approximately  2,500  square feet of  warehouse  space under a one-year  lease
agreement with an unaffiliated  landlord. The monthly aggregate lease payments
for both premises is $2,355.


ITEM 3. Legal Proceedings

     The Registrant is not presently a party to any material  litigation  nor,
to the knowledge of management, is any material litigation threatened.


ITEM 4. Submission of Matters to a Vote of Security Holders

     On  August  19,  1995,  the   Registrant   held  its  annual  meeting  of
stockholders at Doylestown, PA, the number of shares necessary to constitute a
quorum  being  present  either in person or by  proxy.  At this  meeting,  the
stockholders  ratified all actions and  appointments of the Board of Directors
taken and made since the  previous  Annual  Meeting of  Stockholders  in June,
1993. The  stockholders  also elected the slate of Directors  nominated by the
Registrant to hold such office until the next Annual Meeting, and ratified the
appointment  of  Nathan  Blumenfrucht,  CPA,  as  independent  auditor  of the
Registrant for fiscal year 1996.



                  [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

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PART II


ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters
 
     (a) Market Information

     The  Registrant's  Common  Stock,  $.001  par  value,  is  traded  on the
over-the-counter  market  (Bulletin  Board) under the trading symbol QUIG. The
following table sets forth the average range of bid and ask quotations for the
Registrant's Common Stock as reported by the NASD Bulletin Board for each full
quarterly period within the two most recent fiscal years (1).

                   Fiscal Year Ended September 30, 1995 (2)
                            By Quarter    
                   ---------------------------------------- 
                                                  Common Stock
   Quarter             Date                  High             Low
   1st            December 31, 1994          $1.25           $1.00
   2nd            March 31, 1995             $1,25           $1.00
   3rd            June 30, 1995              $1.25           $1.00
   4th            September 30, 1995         $1.25           $1.00


                   Fiscal Year Ended September 30, 1996 (2)
                            By Quarter 
                   ----------------------------------------
                                                  Common Stock
  Quarter              Date                   High             Low
   1st            December 31, 1995          $1.375          $0.875
   2nd            March 31, 1996             $1.375          $0.875
   3rd            June 30, 1996              $2.250          $0.625
   4th            September 30, 1996         $10.50          $1.625



          (1)  Trading  transactions in the  Registrant's  securities has been
               limited to the  over-the-counter  market and,  accordingly,  an
               "established   public  trading   market"  for  such  securities
               currently  exists and has  existed for more than the past sixty
               business  days.  Bid and asked  quotations at fixed prices have
               appeared  regularly in the established  quotation systems on at
               least  one-half of such  business  days.  All prices  indicated
               herein are as reported to the  Registrant  by  broker-dealer(s)
               making a market in its securities. The aforesaid securities are
               not traded or quoted on any  automated  quotation  system.  The
               over-the-counter   market   quotes   indicated   above  reflect
               inter-dealer  prices,  without  retail  mark-up,  mark-down  or
               commission,   and  may   not   necessarily   represent   actual
               transactions.

          (2)  Prices for Fiscal  Years  1995 and 1996 have been  adjusted  to
               reflect  the 10 for-  One  Reverse  Split  of  Common  Stock in
               December, 1995.

(b)  Holders. As of September 30, 1996 there were approximately 253 holders of
     record of Registrant's Common Stock,  including brokerage firms, clearing
     houses,  and/or depository firms holding the Registrant's  securities for
     their respective  clients.  The exact number of beneficial  owners of the
     Registrant's  securities  is not known but would  necessarily  exceed the
     number of record owners indicated above.

(c)  Dividends.  No cash  dividends  were paid  during the fiscal  years ended
     September 30, 1995 and September 30, 1996. The Registrant has not paid or
     declared any dividends upon its Common Stock since its inception, and, by
     reason  of  its  present   financial   status  and  projected   financial
     requirements,  does not  anticipate  paying any dividends upon its Common
     Stock in the foreseeable future.

(d)  Warrants.  In addition to the Registrant's  aforesaid  outstanding Common
     Stock,  there are as of December 26, 1996 issued and  outstanding  Common
     Stock  Purchase  Warrants which are  exercisable  at the  price-per-share
     indicated and which expire on the date indicated, as follows:


     Warrant            Number      Exercise Price          Expiration Date

    CLASS "D"          800,000           $ 1.00             December 31, 2000
    CLASS "E"        1,550,000           $ 3.50             June 30, 2001


ITEM 6. Selected Financial Data

                                         For the Fiscal Years Ended
                                               1996            1995

Statement of Operations Summary:
   Net Sales                               $1,049,561        $501,903
   Net Loss                                 ($694,269)      ($152,556)
   Net Loss Per Share                           ($.15)             (1)

Balance Sheet Summary:
   Total Assets                            $1,456,031        $498,951
   Total Liabilities                         $125,253        $ 93,836
   Stockholder's Equity                    $1,330,778        $361,015

   (1)  Less than one cent per Share



ITEM 7.  Management's  Discussion  And  Analysis of  Financial  Condition 
         And Results of Operations

     During this fiscal  year ended  September  30,  1996,  management  of the
Registrant  made a  strategic  marketing  decision  to  change  the  focus and
business  operations of the Registrant to the manufacture and marketing of the
Registrant's   patented  "Cold-Eeze"  cold  relief  lozenge  product  and  the
development  and  marketing  of  brand  extension   products  based  upon  the
Registrant's proprietary zinc gluconate formula.

     By  commencing  national  distribution  of the only  cold-relief  product
clinically  proven to reduce the severity and duration of the common cold, the
Registrant  believes  that it is offering a  significant  addition to the huge
over-the-counter  cold remedy  market.  Through  greatly  increased  sales and
expansion of manufacturing capacity, and by holding down operation,  marketing
and distribution costs, the Registrant believes it will in Fiscal 1997 reverse
the negative cash flow from operations associated with the product development
The Registrant also intends to continue to utilize the financial and marketing
resources of independent  brokers and marketers to represent the  Registrant's
COLD-EEZE  lozenge  product  and  product   extensions,   thereby  saving  the
Registrant  from the expenses and capital  outlays which the Registrant  would
otherwise be required to expend.

     The Registrant had not generated  significant  revenues from its business
operations  from its inception  through the third fiscal quarter on 1996. As a
result of the release of the clinical  study by The Cleveland  Clinic in July,
1996, and the resultant increased national publicity  concerning the COLD-EEZE
product,  revenue  from  product  sales  greatly  increased  during the fourth
quarter ending  September 30, 1996. For the full fiscal year ending  September
30,  1996,  the  Registrant  had a net  loss  of  ($694,269)  on  revenues  of
$1,049,561.

OUTLOOK

     The  statements  contained  in this  Outlook are based upon  management's
current   expectations   for  Fiscal   Year   1997.   These   statements   are
forward-looking, and actual results may differ materially.

     Due to the  release in July,  1996 of the results of the  clinical  study
conducted  by The  Cleveland  Clinic  which found the  Registrant's  COLD-EEZE
formulation to significantly  decrease the duration and severity of the common
cold, the  Registrant in the fourth quarter of Fiscal Year 1996  experienced a
dramatic increase in purchase orders for the COLD-EEZE product. As a result of
national media coverage of the study's positive results of the efficacy of the
Registrant's  COLD-EEZE  formulation,  public demand for the COLD-EEZE product
quickly  resulted in a significant  backlog in purchase orders by the close of
Fiscal Year 1996.

     Based upon continuing  strong consumer demand for the COLD-EEZE  product,
the  Registrant in September,  1996  initiated a program  designed to increase
manufacturing  capacity in several  stages  throughout  Fiscal Year 1997. As a
result of this program,  the  Registrant  will have the ability to manufacture
and ship in excess of $1.5  million  of the  COLD-EEZE  product  by the end of
January,  1997, with additional  manufacturing capacity coming on-line shortly
thereafter.

     As of December 26, 1996,  the  Registrant had a purchase order backlog of
approximately $7.5 million of COLD-EEZE product, and was, during the months of
November,  1996 and  December,  1996,  manufacturing  and  shipping  COLD-EEZE
product at the rate of approximately $500,000 per week. These sales levels are
significantly  higher than any previous  sales results of the  Registrant  and
management  expects  that these sales levels will  continue for the  immediate
future  and  therefore  will  have  a  materially   positive   effect  on  the
Registrant's results for Fiscal Year 1997.

     Although the Registrant  expects that sales levels will be highest during
the peak cold season from  September  through  March,  near-term  sales levels
should continue to increase as the Registrant  ships its backlog of orders and
distributors  and  retailers  order  increasing  quantities  of the  COLD-EEZE
product to fill  their  distribution  pipeline  and meet  increasing  consumer
demand for the  product.  In  addition,  the  Registrant  expects that it will
during  Fiscal  Year 1997  utilize  its  increased  manufacturing  capacity to
manufacture  sufficient  product for international  distribution of COLD-EEZE.
Although the  Registrant  has begun to establish an  international  network of
independent  distributors,  the current  inability to meet domestic demand for
the COLD-EEZE  product has delayed the  introduction of the COLD-EEZE  product
outside the United States.

     The Registrant  believes that it has developed an effective,  proprietary
cold  remedy  product  which is  beginning  to meet with  widespread  consumer
acceptance.  Future results of the Registrant's  operations,  however, will be
dependent  upon a number  of  factors,  including  competitive  and  financial
pressures  associated with national  distribution of an over-the-counter  cold
remedy.  Future  revenues,  costs,  margins  and profits  will  continue to be
influenced by the Registrant's ability to increase its manufacturing  capacity
and  marketing  and  distribution  capabilities  in  order to  compete  on the
national and international level.

Trends and Uncertainties

     Management is not aware of any trends,  events or uncertainties that have
or are reasonably  likely or expected to have a material  negative impact upon
the  Registrant's  (a)  short  term or long term  liquidity,  (b) net sales or
revenues  or  income  from  continuing  operations  and (c)  the  Registrant's
business  operations may not be considered to be cyclical and/or seasonable in
nature.  The  Registrant  believes  that its increased  marketing  efforts and
increased national publicity  concerning the COLD-EEZE product,  together with
the   Registrant's   increased   manufacturing   capacity,   will   result  in
significantly  increased  revenues in Fiscal 1997 and positive  trends for the
Registrant's business operations.

 
RESULTS OF OPERATIONS

Fiscal 1996 Compared With Fiscal 1995

     For the fiscal year ended  September 30, 1996,  the  Registrant  reported
revenues of $1,049,561 and a net loss of ($694,269), as compared with revenues
of $501,903 and a loss of ($152,556) for the comparable period ended September
30,  1995.  This  substantial  increase  in  revenue is due  primarily  to the
Registrant's  national marketing program for its "Cold-Eeze"  lozenge products
which commenced in the fourth  quarter,  and the Registrant  anticipates  that
this increase in revenue will continue through the 1997 fiscal year. The total
assets of the  Registrant  at September  30, 1996 and  September 30, 1995 were
$1,456,031 and $498,951 respectively.  This significant increase in assets was
due primarily to increased cash and accounts  receivable  attributable  to the
increased  sales as well as increased  capital  infusions from the exercise of
Common Stock options and warrants.

     During this period, the Registrant  experienced a significant increase in
operating  expenses which were directly  related to the increased  revenue and
the expenses  associated with the national  marketing  effort of the COLD-EEZE
product.  In particular,  the major expense items of advertising and promotion
expenses increased to $570,752 in Fiscal 1996 from $93,931 in Fiscal 1995, and
officer salaries  increased to $558,281 in Fiscal 1996 from $106,660 in Fiscal
1995.  As a result  of these  increased  expenses,  the loss  from  operations
increased to ($694,269) for Fiscal 1996 from ($152,556) for Fiscal 1995. Total
general  and   administrative   expenses  for  Fiscal  1996  were  $1,493,794.
Management anticipates that greatly increased revenues during Fiscal 1997 will
result  in  increased   expenditures  for  brokerage  and  sales  commissions,
advertising and promotion,  and product  packaging and freight,  whereas other
categories of general and administrative expenses should remain stable.

     As of September  30, 1996 and  September  30, 1995,  the  Registrant  had
working capital of $998,700 and $349,156 respectively. The increase in working
capital  primarily   attributed  to  the  increase  in  total  current  assets
attributable  to  increased  accounts  receivable  and  cash  as a  result  of
increased  revenues from product sales,  and from the exercise of Common Stock
options and warrants.


Fiscal 1995 Compared with Fiscal 1994

     The Registrant had working  capital of $349,156 for its fiscal year ended
September 30, 1995, as compared to a working  capital  deficiency of ($59,998)
for its fiscal year ended  September  30, 1993.  This  improvement  in working
capital was due primarily to a  significant  increase in revenues from $76,907
in Fiscal 1994 to $509,903 in Fiscal 1995,  combined with  additional  capital
obtained by the Company  through sale of Common  Stock.  Interest  expense for
Fiscal 1995 increased to $3,728 from $3,676 in Fiscal 1992.

     As of  September  30,  1995,  the  Registrant  did not have  any  current
material commitments for capital expenditures.  The Registrant intends to seek
additional  capital  during Fiscal 1996,  which,  together with an anticipated
increase in revenues, should be sufficient to fund anticipated expenses.


Fiscal 1994 Compared with Fiscal 1993

     The  Registrant  had a working  capital  deficiency  of ($68,610) for its
fiscal  year ended  September  30,  1994,  as  compared  to a working  capital
deficiency of ($118,464)  for its fiscal year ended  September 30, 1993.  This
improvement in working capital was due primarily to a significant  increase in
revenues from $35,932 in Fiscal 1993 to $76,907 in Fiscal 1994,  combined with
a  significant  decrease  in General  and  Administrative  Expenses.  Interest
expense for Fiscal 1994 increased to $3,676 from $1,289 from Fiscal 1993. This
increase  in  revenues  results  from  increasing  sales  of the  Registrant's
products which occurred primarily due to the Registrant's marketing program.

     Administrative  expenses,  comprised  primarily  of  office  expense  and
supplies and employee business  expenses,  increased to $26,949 in Fiscal 1994
from $14,002 in Fiscal 1993, while Travel and Entertainment Expenses increased
to $15,551  in Fiscal  1994 from  $8,058 in Fiscal  1993.  Increases  in these
categories  of general  and  administrative  expense  during  this period were
directly  related  to  increased  marketing  and  sales  of  the  Registrant's
products.

     During fiscal year ended  September 30, 1994, the  Registrant  reached an
agreement  with its prior  attorney for a reduction in legal fees owed for the
fiscal  year  ended  September  30,  1993.  As a result of this  reduction  of
$17,500,  the Statement of Operations for the fiscal year ended  September 30,
1994 reflects a negative  balance of ($8,081) in the category of  Professional
Fees.

     As of  September  30,  1994,  the  Registrant  did not have  any  current
material   commitments  for  capital   expenditures.   The  Registrant  sought
additional  capital  during Fiscal 1995,  which,  together with an anticipated
increase in revenues, should be sufficient to fund anticipated expenses.



Material Commitments and Significant Elements of Income/Loss

     The  Registrant  does not  have  any  material  commitments  for  capital
expenditures,  although it anticipates making reasonable capital  expenditures
during Fiscal 1997 to increase its manufacturing capacity. There have not been
any  significant  elements of income or loss that did not arise as a result of
the Registrant's continuing operations,  with accumulated losses due primarily
to the  Registrant's  research  and  development  costs  associated  with  the
development and marketing of the COLD-EEZE lozenge product.



Impact of Inflation

     The Registrant is subject to normal  inflationary  trends and anticipates
that any increased costs should be passed on to its customers.


ITEM 8. Financial Statements and Supplementary Data

     The information required by Item 8 is included immediately following Item
14 of this  Report.  The  Financial  Statements  contained  herein  have  been
prepared  in  accordance   with  the   requirements   of  Regulation  S-X  and
supplementary  financial information,  if any, has been prepared in accordance
with Item 302 of Regulation S-K.


ITEM 9.  Changes In and  Disagreements  With  Accountants  on  Accounting  and
     Financial Disclosure


     None.


<PAGE>
PART III


ITEM 10. Directors and Executive Officers of the Registrant

Directors and Executive Officers

     Listed below are the names, ages and positions with the Registrant of all
Directors  and Executive  Officers of the  Registrant as of December 26, 1996.
Each  director's  term is  scheduled  to expire at the next annual  meeting of
shareholders and when his successor is duly elected:

                                                                 Year First
          Name                  Age        Position                Elected
 
     Guy J. Quigley              55      President, CEO              1989
     301 Dorset Court                    and Director
     Doylestown PA 19801 

     Eric H. Kaytes              41      Vice President of           1989
     15210 Wayside Road                  Finance, CFO,
     Phila., PA 19116                    Secretary-Treas.
                                         and Director

     Charles A. Phillips         50      Vice President, COO         1989
     35 Swamp Road                       and Director
     Erwinna, PA 18920

     Robert L. Pollack, Ph.D.    72      Director of Research        1993
     8442 Chippewa Road                  and Development, and
     Phila., PA 19128                    Director


Term of Office

     Directors  are  elected  to  serve  until  the  next  annual  meeting  of
shareholders  and until their successors have been elected and have qualified.
Officers  are  appointed  to serve until the meeting of the Board of Directors
following the next annual meeting of shareholders  and until their  successors
have been appointed.

ITEM 11. Executive Compensation

     (a)  Cash Compensation

     The following table sets forth  information  concerning all  remuneration
paid or accrued by the  Registrant  for  services  rendered  by the  following
persons in all capacities during the fiscal year ended September 30, 1996:

          (i)  Each  of  the  Registrant's  five  most  compensated  executive
     officers whose cash compensation exceeded $60,000; and

          (ii) all executive officers of the Registrant as a group.



<PAGE>

                                                                 
          Name                       Position               Salary
 
     Guy J. Quigley               President, CEO           $125,000
     301 Dorset Court             and Director
     Doylestown PA 19801 

     Eric H. Kaytes               Vice President of         $75,000
     15210 Wayside Road           Finance, CFO,
     Phila., PA 19116             Secretary-Treas.
                                  and Director

     Charles A. Phillips          Vice President, COO       $85,000
     35 Swamp Road                and Director
     Erwinna, PA 18920

     All Executive Officers       $285,000 as a group (3 Persons)



     (b)  Outstanding Options

          As  of  September  30,  1996,   Officers  and/or  Directors  of  the
     Registrant  have been issued an aggregate of 585,000  options to purchase
     shares of the Registrant's  Common Stock at various exercise prices.  The
     following table sets forth  information as to all options to purchase the
     Registrant's  Common  Stock which were  granted,  and held by each of the
     individuals  listed  on the  remuneration  table  and all  directors  and
     officers as a group:


                              Options
                             To Purchase
                             #of Shares   Exercise         Date
      Name                   Indicated     Price         Granted    Expires

     Guy J. Quigley           100,000       $1.00         12/95       12/00
                              150,000        3.50          7/96        6/01
 
     Charles A. Phillips       75,000       $1.00         12/95       12/00
                              150,000        3.50          7/96        6/01
 
     Eric H. Kaytes            30,000       $1.00         12/95       12/00
                               25,000        3.50          7/96        6/01

     Robert L. Pollack         30,000       $1.00         12/95       12/00
                               25,000        3.50          7/96        6/01



ITEM 12. Security Ownership of Certain Beneficial Owners and Management
 

     (a)  Security Ownership of Certain Beneficial Owners

          The following individuals or entities are known to the Registrant to
     be the  beneficial  owners  of more  than 5% of the  6,049,596  shares of
     Common  Stock  issued and  outstanding  as of  December  31,  1996.  Each
     individual or entity has beneficial  ownership of the shares and has sole
     voting  power and sole  investment  power  with  respect to the number of
     shares beneficially owned.


<PAGE>

          Name and Address of        Amount and Nature of        Percent
            Beneficial  Owner      Beneficial Ownership (1)     of Class

          NUTRITIONAL FOODS, LTD.         364,964 (2)              6.0%
          539 Park Terrace
          Harrisburg, PA 17111

          (1) All shares  referred to herein are  "restricted"  securities  as
          that term is defined under the Securities Act of 1933, as amended.

          (2) In  accordance  with  a  Resolution  adopted  by  the  Board  of
          Directors in May, 1992, the Registrant's Transfer Agent was directed
          to stop transfer of the certificates  representing these shares. The
          Registrant  takes the position that  Nutritional  Foods Ltd. ("NFL")
          should not have  received  these  shares  due to  certain  false and
          misleading  representations  made by it to the Registrant  including
          but  not  limited  to  NFL's  failure  to act  as  the  Registrant's
          international  sales  agent.  To date none of these  shares has ever
          been  presented for transfer,  nor has the  Registrant  been able to
          contact NFL via  Certified  Mail  within the past two years  despite
          several attempts to do so.

     (b)  Security Ownership of Management

          As of September 30, 1996, the total number of shares of Common Stock
     of the Registrant, exclusive of stock options, beneficially owned by each
     officer and director and all officers and directors of the  Registrant as
     a group  (4  persons)  are set  forth as  follows.  Each  individual  has
     beneficial  ownership  of the shares and has sole  voting  power and sole
     investment power with respect to the number of shares beneficially owned.


          Name and Address of        Amount and Nature of        Percent
            Beneficial  Owner     Beneficial Ownership (1)(3)   of Class

         GUY J. QUIGLEY                  1,153,427 (2)            19.0%
         301 Dorset Court
         Doylestown, PA 18901

         ERIC H. KAYTES                    134,496                 0.2%
         15210 Wayside Road
         Philadelphia, PA 19116

         CHARLES A. PHILLIPS               436,496                 0.7%
         35 Swamp Road
         Erwinna, PA 18920

         ROBERT L. POLLACK, Ph.D.           81,000                  0.1%
         8442 Chippewa Road
         Phila., PA 19128

         ALL DIRECTORS AND OFFICERS
         AS A GROUP (4 PERSONS)          1,805,419                 20.0%


          (1) All shares  referred to herein are  "restricted"  securities  as
          that term is defined under the Securities Act of 1933, as amended.

          (2) Does not include an aggregate of 156,496  shares of Common Stock
          owned by members of Guy J. Quigley's family,  which number of shares
          is inclusive of 100,000 shares owned by Wendy Quigley, his wife. Mr.
          Quigley  disclaims any beneficial  interest in or control over those
          shares owned by his wife other than that which may be  attributed to
          him by operation of law.

          (3) Does not include an aggregate of 585,000  Common Stock  Purchase
          Warrants issued in December, 1995 and July, 1996 to Messrs. Quigley,
          Kaytes,  Phillips and Pollack.  These Warrants entitle the holder to
          purchase the  Registrant's  shares of Common Stock at various prices
          ranging for $1.00 to $3.50 per share.
 
     (c)  Change of Control

          The  Registrant  does not know of any  arrangement  or pledge of its
     securities by persons now  considered in control of the  Registrant  that
     might result in a change of such control.



ITEM 13. Certain Relationships and Related Transactions
        

     For the fiscal  year  ended  September  30,  1996 there have not been any
material  transactions  between the  Registrant  and any  Director,  Executive
Officer,  security holder or any member of the immediate  family of any of the
aforementioned which exceeded the sum of $60,000.


[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]








<PAGE>


PART IV

ITEM 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K

     Reference  is herewith  made to (i) pages F-1 through  F-15  inclusive of
this 10-K with  respect to the  financial  statements  and notes  thereto  and
Report of the independent  Certified Public Account with respect thereto;  and
(ii) the cover page of this 10-K with  respect to  documents  incorporated  by
reference in accordance with Rule 12b-23.


SUPPLEMENTAL INFORMATION
 
                                Not applicable.



<PAGE>

                                N. BLUMENFRUCH
                          CERTIFIED PUBLIC ACCOUNTANT
                             1040 EAST 22ND STREET
                             BROOKLYN, N.Y. 11210
                                 ____________

                                (718) 692-2743


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT


The Board of Directors
The Quigley Corporation
Doylestown, Pennsylvania



     I have audited the accompanying balance sheets of The Quigley Corporation
as of September 30, 1996 and 1995,  and the related  Statements of Operations,
Cash Flows and Stockholders'  Equity for the periods ended September 30, 1996,
1995 and  1994.  These  financial  statements  are the  responsibility  of the
Company's  management.  My  responsibility  is to  express an opinion on these
financial statements based on my audit.

     I conducted  my audit in  accordance  with  generally  accepted  auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable  assurance  about  whether  the  financial  statements  are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial  statements.  An audit
also  includes  assessing  the  accounting  principles  used  and  significant
estimates  made by  management,  as well as evaluating  the overall  financial
statements  presentation.  I believe that my audit provides a reasonable basis
for my opinion.

     In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Quigley Corporation as
of September 30, 1996 and 1995 and the results of its  operations and its Cash
Flows and Stockholders'  Equity for the periods ended September 30, 1996, 1995
and 1994, in conformity with generally accepted accounting principles.

     The accompanying  financial  statements have been prepared  assuming that
the Company will continue as a going concern.  However,  the Company  suffered
losses since inception,  which raises  substantial  doubt about its ability to
continue as a going concern.  Management's plans in regard to this matter are
described in Note 2. The financial  statements do not include any  adjustments
that might result from the outcome of this uncertainty.


                                                 /s/ Nathum Blumenfrucht
                                                     -------------------
                                                     Nathum Blumenfrucht
                                               Certified Public Accountant

Brooklyn, New York
December 12, 1996


                                      1
<PAGE>


<TABLE>
<CAPTION>

   

                            THE QUIGLEY CORPORATION
                                 Balance Sheet

                              As of September 30,

                                    ASSETS
                                    ------
                                                           1996       1995
                                                           ----       ---- 
<S>                                                <C>              <C>  

CURRENT ASSETS
   Cash .............................................  $ 370,147    $ 132,739
   Accounts receivable-Note 1 .......................    607,078      135,983
   Notes receivable-Shareholder-Note 6 ..............     88,389       64,659
   Inventory-Note 1 .................................     58,339       82,437
   Due from attorney's escrow .......................          0        9,000
   Prepaid expenses-Note 5 ..........................          0        4,468
                                                      ----------   ----------     
          TOTAL CURRENT ASSETS ......................  1,123,953      429,286

FIXED AND OTHER ASSETS
   Fixed Assets (net of acc. depreciation
   of $28,337 and $14,010) - Note 1 .................     65,314       36,884
   Intangible Asset - Patent ( net of acc   
   amortization of $3,134 in 1996)- Note 1...........    206,866            0
   Deposits- Note 1 .................................      3,377        3,310
   Deferred taxes- Note 1 ...........................     56,521       29,471
                                                      ----------   ----------


TOTAL FIXED AND OTHER ASSETS ........................    332,078       69,665
                                                      ----------   ----------     

TOTAL ASSETS ........................................ $1,456,031     $498,951
                                                      ==========   ========== 

                     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable & accrued expenses-Note 7 ........  $ 84,253     $ 75,677
   Prepaid stock subscription-Note 8 .................    41,000            0
   Loans and note payable-Note 9 .....................         0        4,453
                                                      ----------   ----------     

          TOTAL CURRENT LIABILITIES ..................   125,253       80,130

NON CURRENT LIABILITIES
   Auto loan payable-non current portion .............         0       13,706

   Restricted stock sold under put option
   420,000 common shares-Note 10 .....................         0       44,100

STOCKHOLDERS' EQUITY - Note 10
   Common Stock, $.001 par value; authorized 25,000,000
   shares, issued and outstanding, 4,769,764
   shares in 1996 and 3,361,414 shares in 1995 ........    4,769        3,361

Additional paid-in capital .........................   4,129,256    2,466,632
Accumulated Deficit ................................  (2,803,247)  (2,108,978)
                                                      ----------   ----------     

TOTAL STOCKHOLDERS' EQUITY .........................   1,330,778      361,015
                                                      ----------   ----------     
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .........  $1,456,031     $498,951
                                                      ==========   ==========



</TABLE>



The accompanying notes are an integral part of these financial statements.




                                      2
<PAGE>

<TABLE>
<CAPTION>


                            THE QUIGLEY CORPORATION
                            Statement of Operations
 
                                                     Years Ended September 30,
                                                              1996           1995           1994
<S>                                                      <C>            <C>            <C>      

REVENUE
Sales ................................................   $ 1,049,561    $   501,903    $    76,907
   Cost of Goods Sold ................................       283,967        111,834         26,751
                                                         -----------    -----------    -----------
Gross Profit .........................................       765,594        390,069         50,156

GENERAL AND ADMINISTRATIVE EXPENSES

        Officer salaries & payroll taxes .............       558,281        106,660         50,000
        Services rendered & R&D-Note 10 ..............        71,256         80,411          8,750
        Administrative expenses-Note 12 ..............        42,906         39,305         26,949
        Commissions, consulting & royalties ..........        77,030         58,711          6,100
        Travel, entertainment and shows ..............         6,009         13,758         15,551
        Depreciation and amortization ................        17,461          4,728          2,773
        Utilities ....................................        11,013          9,498          9,722
        Advertising and promotion ....................       570,752         93,931          3,056
        Professional .................................        65,268         69,325         (8,081)
        Rent .........................................        28,265         20,029         32,893
        Interest .....................................         4,523          3,728          3,676
        Insurance ....................................        19,878         25,697          5,390
        Office and equipment rental ..................         1,522          1,290         13,446
        Waages and outside labor .....................        10,901         18,156              0
        Dues and subscriptions .......................         1,777          1,420              0
        Stock transfer and maintenance fees ..........         4,462          3,600          5,700
        Miscellaneous ................................         2,490          2,449          4,090
                                                        ------------   ------------   ------------ 
     Total General and 
     administrative expenses .........................     1,493,794        552,696        180,015
                                                        ------------   ------------   ------------
     Loss before other income provision for income
     tax and cumulative effective adjustment .........      (728,200)      (162,627)      (129,859)
     Interest Income .................................         6,881          4,126             49
     Sale of distribution rights-Note 11 .............             0              0         32,500
                                                        ------------   ------------   ------------   
        Subtotal .....................................      (721,319)      (158,501)       (97,310)
     
  Less:  Provision for Corporate Income
             Tax -(Credit)- Note I ...................       (27,050)        (5,945)         1,962
                                                        ------------   ------------   ------------
        Loss before cumulative adjustment ............      (694,269)      (152,556)       (95,348)

Less:  Cumulative Effect Adjustment - (Credit)- Note 1          --             --           21,564
                                                        ------------   ------------   ------------
Net Loss                                                 $  (694,269)   $  (152,556)   $   (73,784)
                                                        ============   ============   ============
        
Loss per share:
     Prior to cumulative effect adjust ...............          (.15)          (.00)          (.01)
     Cumulative effect adjustment ....................          (.15)          (.00)            -
                                                        ------------   ------------   ------------
NET LOSS PER SHARE ...................................   $      (.15)   $      (.00)   $      (.01)
                                                        ============   ============   ============

</TABLE>


The accompanying notes are an integral part of these financial statements.



                                      3
<PAGE>


<TABLE>
<CAPTION>

                                          THE QUIGLEY CORPORATION
                                          Statement of Cash Flows


                                                       Years Ended
                                                      September 30,
                                                 1996         1995        1994
                                                 ----         ----        ----


<S>                                        <C>            <C>          <C>      

  CASH FLOWS FROM OPERATING ACTIVITIES:

  Net loss .............................   $  (694,269)   $(152,556)   $(73,784)
  Adjustments to reconcile net loss to
  net cash used by operating activities
  Non-cash items included in loss:
  Amortization and depreciation ........        17,461        4,728       2,773
  Expenses incurred without cost
  credited to additional paid in capital             0            0      40,000
  Paid through the issuance of
  common stock .........................     1,104,586      110,214      63,250
  Allowance for deferred income taxes ..       (27,050)      (5,945)    (23,526)
  Conversion of put option .............       (44,100)           0           0

  Change in assets and liabilities:
  Accounts receivable ..................      (471,095)    (135,983)          0
  Inventory ............................        24,098      (64,912)     (8,318)
  Prepaid expenses .....................         4,468       (4,468)      8,474
  Notes and escrow receivable ..........       (14,730)     (73,659)          0
  Deposits .............................           (67)       2,765      (3,235)
  Prepaid stock subscription ...........        41,000            0           0
  Accounts payable and accrued expenses          8,576        4,772     (24,242)
                                            ----------    ---------    ---------
  Cash Used by Operations ..............       (51,122)    (315,044)    (18,608)


  CASH FLOWS FROM INVESTING ACTIVITIES:

  Purchases of fixed and other assets ..       (42,757)     (35,725)     (1,000)
  Acquisition of patent rights .........      (210,000)           0           0

  CASH FLOWS FROM FINANCING ACTIVITIES:
  Sale of restricted common stock ......       515,346      433,925      20,388
  Conversion of put option into equity .        44,100            0           0
  Exercise and issuance of various options           0       38,042           0
  Loans and notes payable ..............       (18,159)       6,919       3,440
                                            ----------    ---------    ---------


  NET INCREASE (DECREASE) IN CASH ......       237,408      128,117       4,220

  CASH AT BEGINNING OF PERIOD ..........       132,739        4,622         402
                                            ----------    ---------    ---------

  CASH AT END OF PERIOD ................   $   370,147    $ 132,739    $  4,622
                                           ===========    =========    =========

</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      4
<PAGE>

<TABLE>
<CAPTION>

                            THE QUIGLEY CORPORATION
                      Statement of Cash Flows (continued)


                                                    Years Ended
                                                    September 30,
                                           1996          1995          1994
                                           ----          ----          ----
<S>                                        <C>            <C>          <C>      

SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
---------------------------
Expenses paid by issuance of
common stock and options ...........   $1,104,586   $  110,214   $   63,250

Non cash investing & financing:
Conversion of put option into equity       44,100

Acquisition of patent rights .......      210,000



</TABLE>







































The accompanying notes are an integral part of these financial statements.




                                      5
<PAGE>


<TABLE>
<CAPTION>

                                          THE QUIGLEY CORPORATION
                                STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
   NOTE 10                                                                  Additional      Retained
                                           Common Stock          Issued      Paid-In        Earnings
                                               Shares            Amount      Capital        (Deficit)        Total
                                           -----------------------------------------------------------------------  
<S>                                                   <C>            <C>            <C>           <C>            <C>
Balance
Sept. 30, 1993 ............................    24,455,253    $     2,445    $ 1,761,729   $(1,882,638)   $  (118,464)

Sale of S registration
shares-net of commissions
June 1994 .................................       285,500             29         16,359                       16,388

Exercise of options by officers August 1994     3,000,000            300         20,700                       21,000

Exercise of options-
August 1994 ...............................       500,000             50            (50)                           0

Issuance of stock in settlement of
accounts payable balance-
August 1994 ..............................        256,667             26          3,474                        3,500

Issuance of stock in exchange of
loan and notes payable-
August and September 1994 .................       600,000             60         29,940                       30,000

Sale of shares-
Sept. 1994 ................................        53,334              5          3,995                        4,000

Issuance of stock for services rendered -
September 1994 ............................       100,000             10          8,740                        8,750

Expenses incurred without cost
credited to paid in capital-Note 12                                              40,000                       40,000

Net Loss for Period Ended
September 30, 1994                                                                            (73,784)       (73,784)
                                               ----------    -----------    -----------   -----------     -----------     
Balance at Sept. 30, 1994 .................    29,250,754          2,925      1,884,887    (1,956,422)       (68,610)

Issuance of stock for services rendered
Oct. 1, 1994-Sept. 30, 1995 ...............       881,711             88        110,126                      110,214

Exercise of warrants-Jan. 1995 ............       211,343             21         38,021                       38,042
                                               ----------    -----------    -----------   -----------     ----------     
Subtotal ..................................   $30,343,808    $     3,034    $ 2,033,034   $(1,956,422)   $    79,646
</TABLE>

The accompanying notes are an integral part of these financial statements.



                                      6
<PAGE>

<TABLE>
<CAPTION>


                                          THE QUIGLEY CORPORATION

                                STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
(Continued)

   NOTE 10                                                         Additional      Retained
                                   Common Stock          Issued      Paid-In        Earnings
                                       Shares            Amount      Capital        (Deficit)         Total
                                   -------------------------------------------------------------------------  
<S>                                        <C>             <C>            <C>            <C>             <C>

Balance .......................     30,343,808          $3,034     $2,033,034    $(1,956,422)        $79,646

Sale of 504 Stock-
December 1994 for cash & notes-
Net of expenses ...............      1,597,000             160        185,715                        185,875

Sale of Stock Oct. 1, 1994-
Sept. 30, 1995 for cash .......      1,673,333             167        247,883                        248,050

Net Loss for period ended
September 30, 1995 ............                                                     (152,556)       (152,556)
                                   -----------       ---------      ---------     -----------       --------
Balance at Sept. 30, 1995 .....     33,614,141           3,361      2,466,632     (2,108,978)        361,015

Reverse-1 for 10 Stock
split Dec. 1995 ...............    (30,252,727)

Conversion of put option to
equity Jan. 1996 ..............         42,000              42         44,058                         44,100

Shares issued to officers net
of prior compensation
recognized ....................        530,000             530        313,220                        313,750

Issuance of stock for services
rendered -Oct. 1, 1995 -
Sept. 30, 1996 ................        269,320             269        580,567                        580,836

Issuance of stock for Patent
rights- Note 1 ................         60,000              60        209,940                        210,000

Stock issued to
underwriter-June 1996 .........          7,873               8             (8)                             0

Exercise of warrants-
Jan. 1996 .....................          2,070               2           2,068                         2,070

Sale of Stock, options &
exercise of options-
Oct. 1, 1995- Sept. 30, 1996
for cash & notes ..............        497,087             497         512,779                       513,276

Net Loss for period ended
September 30, 1996 ............                                                     (694,269)       (694,269)

Balance at                          ------------------------------------------------------------------------
Sept. 30, 1996 ................      4,769,764          $4,769      $4,129,256   $(2,803,247)     $1,330,778
                                    ==========      ==========      ==========   ==+========      ==========

</TABLE>

The accompanying notes are an integral part of these financial statements.



                                      7
<PAGE>


                            THE QUIGLEY CORPORATION

                         NOTES TO FINANCIAL STATEMENTS
                              September 30, 1996



NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

     (a) Organization and operations

          The Quigley Corporation (the "Company") was organized under the laws
     of the State of Nevada on August 24, 1989. The Company  started  business
     October 1, 1989 and has been engaged in the business of marketing  health
     products . The products are fully  developed and are being offered to the
     general public.  For the fiscal year ended September 30, 1996 the Company
     had revenues of approximately $1,049,000 from the sale of these products.
     For the most recent  fiscal  periods the  Company  has  concentrated  its
     efforts in the  promotion of a product known as  "Cold-Eeze".  Management
     believes that it can generate enough revenue in the next twelve months to
     sustain -the  Company.  Management is also  pursuing  additional  capital
     through various methods.


     (b) Revenue

          Revenue is recognized from product sales when the product is shipped
     using the accrual basis of accounting.

     (c) Accounts Receivable

          The direct write off method of accounting  for bad debts is utilized
     and there is no allowance for doubtful  accounts.  For the current period
     approximately $764 of bad debts was written off.


     (d) Inventory

          Inventory  is  stated  at the  lower  of  cost  or  market.  Cost is
     determined by the first in, first out method.

     (e) Fixed Assets

          Fixed assets are  reflected on the  accompanying  statements at cost
     less  accumulated  depreciation.  A combination  of the straight line and
     accelerated  methods of depreciation  is -Lased  utilizing a life of five
     years for machinery and equipment and a life of seven years for furniture
     and fixtures.


     (f) Patent

          During the current  fiscal  period the Company  reached an agreement
     with an  individual  who had patent  rights on the use of zinc  gluconate
     which is used in the formulation of the Company's  products.  The Company
     issued  60,000 of its common  shares in return for the exclusive and sole
     right to this  license / patent.  The stock  issued  had a fair  value of
     $210,000  and is being  amortized  over the  remaining  patent life which
     expires in March 2002.  In addition to the payment of stock , the Company
     has  agreed  to  pay  royalties  to the  previous  patentholder  for  the
     remaining term of the patent.

     (g) Deposits

          Deposits  are  comprised of rent  security  and the related  accrued
     interest.




                                      8
<PAGE>

                            THE QUIGLEY CORPORATION

                         NOTES TO FINANCIAL STATEMENTS
                             September 30, 1996

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)


     (h) Income Taxes

          Effective  October  1,  1993  the  Company  changed  its  method  of
     accounting for income taxes to comply with SFAS No. 109, "Accounting for-
     Income  Taxes" - The Company has suffered net losses since  inception and
     has a NOL carry forward of approximately $1,500,000.  Using an 15% income
     tax rate results in a deferred  tax asset of  approximately  $225,000.  A
     valuation  allowance of $168,479 was established to reduced  deferred tax
     assets  to  amounts  expected  to be  realized.  This  resulted  in a net
     deferred  tax asset of $56,521.  Of this  $27,050  was  derived  from the
     current year's NOL (after  provision for the valuation  allowance).  This
     amount was credited to provision for  Corporate  Income Tax. Of the total
     tax asset-  $21,564  represented  prior  years tax  benefits  before the
     adoption by the  Company of SFAS  No.109.  This credit was  reported as a
     Cumulative  Effect  Adjustment  on the  Statement of  Operations  for the
     period ended September 30, 1994.

     (i) Fiscal Year

          The Company's fiscal year ends September 30th.

     (j) Expenses Incurred Without Cost

          Certain  expenses  were incurred  without cost.  For the fiscal year
     ended Sept. 30, 1994 these costs were for $40,000 of officers'  salaries.
     The corresponding expenses was charged on the Statement of operations and
     additional paid-in capital was credited for such amounts.  For the fiscal
     years  ended   September   30,  1996  and  1995  the  officers   received
     remuneration of approximately  $555,000 and $106,000  respectively.  This
     includes  common  stock  issued to the  officers  which was shown at fair
     value at the time of issuance.


NOTE 2- MANAGEMENTS PLANS

     It  is  managements  contention  that  they  will  be  able  to  generate
sufficient cash from sales to support its operations for the following  twelve
month  period.  In  addition  the  Company  is  contemplating  various  equity
offerings in the next fiscal year.


NOTE 3- LEASE COMMITMENTS

     Operating  Leases- The Company has a lease  agreement on its office space
which expires in December 1998.  There is no lease  agreement on its warehouse
space and the Company  occupies the  premises on a month to month  basis.  The
following  table  represents the future minimum rent payments  required on the
operating lease with terms in excess of one year as of September 30, 1996.

     Fiscal Year Ended September 30,
 
     1997              16,440
     1998              18,213
     1999               4,701 
                      ------- 
                      $39,354
                      =======

     Capital  Leases- in the -most  recent  fiscal  year the  Company  was not
obligated under any capital lease.



                                      9
<PAGE>


                            THE QUIGLEY CORPORATION

                         NOTES TO FINANCIAL STATEMENTS
                              September 30, 1996


NOTE 4 - RELATED PARTY TRANSACTIONS

          The  Company had various  transactions  with the Ruyala  Corporation
     since  inception.  Ruyala is owned in its entirety by Wendy  Quigley (the
     wife of the Company's  President,  Guy Quigley).  For part of the current
     fiscal year officer  compensation owing to Guy and Wendy Quigley was paid
     to the Ruyala corporation and was charged to officers compensation on the
     Statement of operations.



NOTE 5- PREPAID EXPENSES & BANK LOAN PAYABLE

     Prepaid expenses  represents  prepaid interest on an automobile loan. The
automobile loan was satisfied in its entirety in the current fiscal period.



NOTE 6- NOTES RECEIVABLE-SHAREHOLDERS

     Notes receivable  include  principal and interest due from a shareholder.
The Company sold shares under a Section 504  registration  and received a note
in the amount of $61,875 in 1995. The note was originally due June 1, 1996 and
bore interest at a rate of 6% per annum. The Board of Directors  authorized an
extension  on the due date of the note untill July 1, 1997.  The balance as of
September 30, 1996 was $53,389.

     Additionally,  certain option and warrant holders exercised their options
in September  1996. The full proceeds of the exercise were not received in the
current period.  As of September 30, 1996 the balance owing to the Company was
$35,000.


NOTE 7- ACCOUNTS PAYABLE AND ACCRUED EXPENSES

     Accounts  payable  and  accrued  expenses  represent  various  short term
operating expenses of the Company including the purchase of merchandise.


NOTE 8- PREPAID STOCK SUBSCRIPTION

     As of September 30, 1996 an investor  deposited  $41,000 for the purchase
of common shares which were issued in October 1996.


NOTE 9- LOANS AND NOTES PAYABLE

     (a) As of September 30, 1995 loans payable  represented  an amount due to
officers of $440.  The loan was  satisfied  in full during the current  fiscal
period.

     (b) The Company purchased an automobile and financed part of the purchase
through a bank loan.  The total amount  financed was $15,324 at an approximate
rate of 11% for a period of 60 months. As of September 30, 1995  approximately
$17,700 was owed. The loan was satisfied in full in the current period.




                                      10
<PAGE>

                            THE QUIGLEY CORPORATION

                         NOTES TO FINANCIAL STATEMENTS
                              September 30, 1996


NOTE 10- CAPITALIZATION

     (a) In August of 1994 an option holder exercised  250,000 options in lieu
of the $2,500 owed to him by the Company for  advertising  services  rendered.
The Statement of  operations  reflects a charge to  advertising  in the period
where incurred.

     (b) In November 1992 , January and February  1993 the Company  received a
total of $35,000 from an investor.  The  agreement  provided that the investor
was to  receive  12,000  restricted  shares  of the  Company  for each  $1,000
invested up to an initial maximum of 1,800,000  restricted common shares for a
maximum, investment of $150,000.

     The Company had granted the  investor  certain  resale  rights  where the
investor  could  require the Company to  repurchase  the shares at  increasing
prices ranging from $.0972 to $.105 per share. This option commenced 24 months
from  January 1993 and expired 36 months from such date.  As of September  30,
1995 the Company had issued 420,000 shares of stock to the investor.

     Due to the  potential  exercise  of the put option,  the above  mentioned
shares had been segregated  from the  stockholders'  permanent  equity and had
been included in the  mezzanine  section of the balance sheet in the amount of
$44,100 (the maximum  repurchase price). In the current- fiscal period the put
option expired and the shares were moved to the permanent equity section.

     (c) In June of 1994 the Company sold 285,500 shares in a Regulation  "S"
sale of common shares of the Company.  The shares were offered  exclusively to
non-US persons.  The shares were sold at $.07 a share for total gross proceeds
of $19,985.  Commissions  totaling  $3,597 were deducted  from these  proceeds
resulting in a net amount of $16,388 being forwarded to the Company.

     (d) In August 1994  various  officers  and / or their  spouses  exercised
options  which were issued in 1992.  A total of  3,000,000  shares were issued
upon the exercise of these options. The options exercised ranged in price from
$.001 through $.10 per share. Total consideration was to have been $21,000. In
lieu of payment, the officers applied monies owed to them by the Company.

     (e) In August 1994 Gary  Quigley (a relative of  the Company's President)
exercised 500,000 options out of the 1,000,000 granted to him in 1992. in lieu
of paying the $.10 per share Gary Quigley  relinquished the remaining  500,000
options issued to him. The options were then cancelled by the Company.

     (f) In August 1994 the Company  issued 360,000  restricted  shares to Dr.
Robert Pollack in total  repayment of a debt of $18,000 ($.05 per share).  The
debt was incurred  over a period of fifteen  months and included $820 worth of
interest.

     (g) In Sept-ember  1994 the Company issued 240,000  restricted  shares to
Drs.  Godfrey  in full  repayment  of a loan  owing to them in the  amount  of
$12,000 ($. 05 per share) .

     (h) In August 1994, 6,667 restricted shares were issued to Robert Moore in
payment of a debt owed to him of $1,000 ($.15 per share) for the  installation
of some fixed assets The balance sheet  account-  fixed assets was charged for
this item in a prior period in the amount of $1,000.

     (i) In September 1994 Mrs.  Robert Pollack  purchased  53,334  restricted
shares of the Company at $.075 for a total cash consideration of $4,000.



                                      11
<PAGE>

                            THE QUIGLEY CORPORATION

                         NOTES TO FINANCIAL STATEMENTS
                              September 30, 1996

NOTE 10- CAPITALIZATION (Continued)


     (j) In August 1994 the Company issued 100,000 restricted shares of common
stock to Dr. John  Godfrey for  services  rendered.  A charge in the amount of
$8,750 was made to services  rendered on the Statement of  operations  for the
fair value of the stock.

     (k) During the period October 1, 1994 through  September 30, 1995 various
individuals purchased restricted stock from the Company. 1,884,676 shares were
sold for which the Company  received  consideration  of $243,050 or an average
price of approximately $.13 per share.

     (l)  In  January  1995  warrants  which  were  originally  issued  to the
underwriter  were exercised by a third party who had the warrants  transferred
to him.  Total  shares  issued were  211,343  in  consideration  of an $38,042
exercise price or a per share price of $.18.

     (m) In December 1994 and January 1995 the Company sold  1,597,000  shares
of  stock  under  a  Registration  D  private  placement  offering  for  total
consideration  of $199,625.  The Company paid  commissions  on the sale in the
amount of $13,750  which was charged  against  paid in  capital.   The Company
received an interest  bearing  note  receivable  in the amount of $61,875 from
some investors. This note is due June 1, 1997.

     (n) During the period October 1, 1994 through  September 30, 1995 various
individuals  were issued  restricted  shares in return for goods and  services
rendered.  The total  number of shares  issued was 881,711.  The  statement of
operations  was  charged  a total of  $110,214  or $.125  per  share for these
issuance. The various expenses categories charged were:

      Services rendered\ R&D          $70,711
      Advertising & Promotion          19,813
      Legal                             7,500
      Commissions                       6,875
      Purchases of goods                2,815
      Office expense                    2,500
                                     --------
      Total                          $110,214
                                     ========

The valuation was based on the fair value of the stock which  approximated the
value of goods and services rendered.

     (o) In December 1995 the Company initiated a 1 for 10 reverse stock split
and changed the par value of the stock to $.OOI per common  share.  In January
1996 all a, b, and c warrants  exercising  prices were reduced from $.25, $.50
and $.75 to $.10,  $.15 and $.20  respectively.  All warrants of these classes
expired as of January 31, 1996.

     (p) During the period October 1, 1995 through  September 30, 1996 various
individuals were issued shares in return for goods and services rendered.  The
total number of shares (postreverse  split) issued was 269,320.  The statement
of operations was charged a total of $580,836 or an average of $2.16 per share
for these issuance. The various expenses categories charged were:

      Services rendered\ R&D      $  41,836
      Advertising & Promotion       434,000
      Legal                         105,000
                                   --------
      Total                        $580,836
                                   ========






                                      12
<PAGE>

                            THE QUIGLEY CORPORATION

                         NOTES TO FINANCIAL STATEMENTS
                              September 30, 1996

NOTE 10- CAPITALIZATION (Continued)


     (q) In  addition,  an  underwriter was issued 7,873  shares for  services
rendered.  Additional  paid in capital was charged for this  transaction.  The
valuation was based on the fair value of the stock at the time of issuance.

     (r) During  the  period  October 1, 1995  through  September  30,  1996 -
530,000 shares were issued to various officers for past service rendered.  The
fair value of these  shares was $463,750 . This amount was reduced by $150,000
which represents amounts charged in prior periods for compensation to officers
which was never paid.

     (s) In January and February 1996 20,700 of A warrants  were  exercised by
various  individuals  who received 2,070 shares for a total  consideration  of
$2,070.

     (t) During the period October 1, 1995 through  September 30, 1996 various
individuals purchased shares, options and or exercised options in the Company.
The total  shares  issued was 497,087  and total  consideration  received  was
$515,346.  By agreement  with the  optionholders,  1,250,000  shares of common
stock underlying the purchase options were registered  pursuant to Form S-8 in
August and October 1996.

     (u) During  the  current  period the  Company  entered  into a  marketing
agreement  with  Pacific Rim  Pharmaceuticals  for  developing  the  Company's
product in the Far East.  Pacific Rim Pharmaceutical was issued 300,000 common
stock Class D warrants exercisable at $1 and expiring in December 2000.


NOTE 11- INCOME

     On June 21, 1993, the Company  received a non  refundable  deposit in the
amount of $20,000 from a Canadian  corporation  (Cold-Eeze  Canada Inc.) These
monies were a deposit  toward a total of $250,000 for an option to acquire the
distribution rights for one of the Company's product.

     In November 1993 Cold-Eeze  Canada Inc.  transferred  their  distribution
rights to Sunburst  Resources.  The Company and Sunburst had  renegotiated the
original  agreement to allow for  distribution  in the United  States on a non
exclusive  agreement.  Sunburst  agreed to pay $75,000 to the Company prior to
March 15, 1994. On January 15, 1994 the Company received the first installment
of $12,500. In January 1994 the Company terminated its agreement with Sunburst
as they had reneged on any further  payments.  The receipt of these monies was
shown as  income  from the sale of  distribution  rights on the  Statement  of
operations in the period that negotiations ceased.




                                      13
<PAGE>

                            THE QUIGLEY CORPORATION

                         NOTES TO FINANCIAL STATEMENTS
                              September 30, 1996


NOTE 12- EXPENSES

     (a) Certain expenses were incurred without cost. Management's estimate of
the value of these costs are:

                                             For year
                                        ended September 30,
                                          1995 and 1996           1994
                                        -------------------       ----

         Officer's Salary                      $ 0              $40,000

The  corresponding  expense was charged on the  statement  of  operations  and
additional paid-in capital was credited for such amounts.

     (b)  Administrative  expenses  are  comprised  mainly of office  expense,
supplies and employee business expenses.


NOTE 13- COMMITMENTS AND CONTINGENCIES

     The Company is obligated on a lease on its office which expires  December
1998. The current monthly rent is $1,370.


NOTE 14- STOCK OPTIONS AND WARRANTS

     As of  September  30,  1996 the  following  is a list of  stock  warrants
outstanding:

                                    PRICE        ---------DATE OF---------
     AMOUNT             CLASS     EXERCISE       ISSUANCE       EXPIRATION
     ------             -----     --------       --------       ----------

        850,000           E         $3.50          JULY 1996       JUNE 2001
        250,000           D         $1.00          DEC. 1995       DEC. 2000
        250,000           D         $1.00          DEC. 1994       DEC. 2000
        300,000           D         $1.00          FEB. 1996       DEC. 2000


     During the current  period the Company sold  incentive  stock  options to
various salesman.  The Company received a total of $960 from the sale of these
options.  140,000  options were issued in total and the exercise  price ranges
from  $1.25 to $1.50.  The  options  expire in 1998 and are  exercisable  upon
reaching certain sales goals.


NOTE 15- SUBSEQUENT EVENTS

     On October 1, 1996 the Company hired the investment  banking firm,  Sands
Brothers & Co. to assist in raising  additional  capital  needed for expansion
purposes.  The company is  considering  a private  placement  of common  stock
pursuant to Regulation  D. It is estimated  that total funds raised will be in
range of $6,000,000 - $8,000,000.



                                      14
<PAGE>


SIGNATURES

     Pursuant  to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934,  the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


THE QUIGLEY CORPORATION




   By:     /s/ Guy J. Quigley
               --------------
         Guy J. Quigley, President and
         Chief Executive Officer        

         Dated: December 31, 1996

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the  following  persons on behalf of the  Registrant
and in the capacities and on the dates indicated:

         Signature                        Title                      Date


         /s/ Guy J. Quigley
             --------------  
             Guy J. Quigley           Chairman of the Board,         12/31/96
                                      President, Chief
                                      Executive Officer
                                      and Director


         /s/ Eric H. Kaytes   
             --------------     
             Eric H. Kaytes           Vice Pres. of Finance,         12/31/96
                                      CFO, Secretary-Treas.,
                                      and Director


         /s/ Charles A. Phillips
             -------------------
             Charles A. Phillips      Vice President, COO            12/31/96
                                      and Director

         /s/ Dr. Robert L. Pollack
             ---------------------   
             Dr. Robert L. Pollack    Director                       12/31/96